Cronyism is creeping in

There are current warning signs that a form of government corruption, which I call "creeping cronyism," may be slithering its way into Maine's political system. Recently, Governor Paul LePage and Department of Health and Human Services (DHHS) Commissioner Mary Mayhew announced with great fanfare a contract with Gary Alexander...

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By Ed Legg

seacoastonline.com

By Ed Legg

Posted Dec. 26, 2013 at 2:00 AM

By Ed Legg

Posted Dec. 26, 2013 at 2:00 AM

» Social News

There are current warning signs that a form of government corruption, which I call "creeping cronyism," may be slithering its way into Maine's political system. Recently, Governor Paul LePage and Department of Health and Human Services (DHHS) Commissioner Mary Mayhew announced with great fanfare a contract with Gary Alexander, the former head of Pennsylvania's welfare department. Under this contract, The Alexander Group will produce an "independent" report which would explore the merits of shrinking Medicaid, known here as MaineCare. The Alexander Group team of "experts" will do this work for the tidy sum of $925,000, paid for by Maine taxpayers.

One of Alexander's most criticized achievements was cutting off 89,000 children from Pennsylvania's Medicaid program. These cuts were accomplished with the blessing of Pennsylvania's conservative Republican governor, Tom Corbett. Alexander's team consists of very conservative and right-wing political activists who hardly qualify as professional independent analysts. The distinct odor of hot tea wafting up from the tea party pot soon may invade our state's low income households.

If Alexander's anti-welfare policies prevail in Maine, too many of our children and families will no longer be eligible for the benefits they now receive. Le Page and Mayhew have spent much of their term in office claiming the state of Maine's government can afford practically nothing. By waving a magic wand, they now assert that we can and should afford to pay almost $1 million for a report which most likely will tell them exactly what they want to hear.

When we lived in Texas in the 1980s, my wife Ann and I took turns directing a large corporation that was engaged in major lawsuits against crooked developers and bankers. After Ann exposed the developers, I put together a strong legal team and managed the litigation. The lack of effective government regulation allowed developers to purchase controlling interests in savings and loan banks and to cozy up to administrators of larger banks. "Creeping cronyism" networks were created in many parts of Texas. The developers/bankers loaned each other huge sums of money based on what turned out to be vastly inflated appraisals which served as "collateral" to secure the loans for under-capitalized development projects. The predictable result was the collapse of most of the major banks in Texas and many of the savings and loan banks, especially those that were owned by or in cahoots with unethical developers.

During this sad period of Texas history, the highest appraiser designation, Member of the Appraisal Institute (MAI), became described in legal and real estate circles as "Made As Instructed." Supposedly successful and respected professionals, including bankers, builders and developers ended up in bankruptcy courts and/or were decked out in federal prison outfits. Eventually, the financial, real estate and appraisal standards were elevated to a much higher level by legislation, the courts and by in-house reform.

Before the $925,000 of state funds are paid to The Alexander Group, the governor and Commissioner Mayhew should answer the question of whether the produced report will be a "Made As Instructed" document. The report probably will recommend severely reducing benefits for Maine's low income families — a policy regularly articulated by the governor and the commissioner.

A less disturbing but connecting concern involves the relocation and construction of a new DHHS and Department of Labor building. Unlike The Alexander Group chicanery, the contract for the new state office building was put out for bids. Although ELC Management, Inc. (ELC) did not submit the lowest bid, the contract was awarded to that group. The president of ELC is Eric Cianchette. He is also a major donor to the governor's political campaigns and to the Maine Republican Party. The ELC proposal moves the current DHHS offices from the downtown Portland peninsula to near the Portland International Jetport in South Portland.

I do not disparage the earned prominence in Maine of the Cianchette families in terms of their business, economic and philanthropic contributions. There also is not enough substantial evidence of dishonesty, favoritism or other misdeeds regarding the contract won by ELC. Eric Cianchette does have close connections to Governor LePage and to the Maine Republican Party. His cousin, Peter Cianchette, unsuccessfully ran against Democrat John Baldacci in the 2002 gubernatorial election. Eric Chianchette's son, Mike Cianchette, was Governor LePage's lead legal counsel before he was deployed to Afghanistan as a member of the Naval Reserve. The problem with these political and personal connections is they do reflect the appearance of favoritism even if it does not exist.

Staunch critics of the DHHS relocation suspect that this is another example of the governor's and Commissioner Mayhew's attacks on welfare beneficiaries. A major issue in the new DHHS building controversy is the difficult, perhaps daunting, accessibility to the South Portland facilities. In an article by Portland Press Herald Staff Writer Steve Mistler titled, "Critics of move by DHHS cite 72 bus stops to get there and back," Mistler noted that the round trip from downtown Portland out to the airport area "would take an 80-minute bus ride." Mistler then compared the accessibility of the proposed site to the existing offices in downtown Portland. He wrote, —» many walk or use public transportation to reach the current office on Marginal Way, which is within walking distance of most neighborhoods on Portland's peninsula."

Is the ELC/DHHS brouhaha as shameful as the shenanigans surrounding the Gary Alexander contract? The answer is "definitely not yet." Is the ELC victory a symptom of "creeping cronyism?" Only time and vigorous responsible pursuit of the truth will provide a final answer.